This is a rush transcript of "Special Report With Brit Hume" from December 31, 2008. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

U.S. SENATE APPOINTEE ROLAND BURRIS: I think the governor is carrying out his duties and responsibilities. And he's selected me to be the replacement in the seat for the United States Senate.

Whether or not he can get some advantage out of that, that's up to him.

(END VIDEO CLIP)

JIM ANGLE, GUEST HOST: That's Roland Burris, who was appointed to fill the Obama Senate seat, trying to explain away the questions about accepting the appointment from governor Blagojevich.

Now some analytical observations from Bill Sammon, FOX News Washington deputy managing editor, Jeff Birnbaum, managing editor digital of The Washington Times, and FOX News contributor and syndicated columnist Charles Krauthammer, also a FOX News contributor.

Well, gentlemen, a lot more shoes were dropping on this today. We now know that Burris will ask the Illinois Supreme Court to force certification of his appointment because the state secretary of state refused to do so.

We also know that Burris is planning to come next week when members of the Congress are sworn in, but says if he is refused that right and honor that he will not make a big deal out of it.

So, here we are in the second day of this, and Burris is still saying, Charles, that he's coming, he's going to be here, and hopes to be sworn in.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: As we know for sure is that is going to be a huge embarrassment one way or the other to Democrats on the Hill.

A side effect of this story is that there's no way for the press to either neglect or suppress the fact that the governor at the heart of this corruption is a Democrat. When the story exploded — there's a tendency in the media if it's a Republican who's got a scandal, it's in line one. You learn about that.

Republican Senator Larry Craig, as if the word "Republican" the Christian name is a "give-me," it appears all the time. But if it's a Democrat, it drops out.

In fact, when that Blago exploded, CNN and AP didn't even mention he was a Democrat. Now the leader of the Democrats in the Senate and Democratic caucus are going to deny a Democratic appointee a space in the senate. It has Democrat all over it.

If you add that to the troubles of the chairman of the House Ways and Means, Charlie Rangel, Chris Dodd, who has got issues with sweetheart deals with the mortgage lenders, and Governor Spitzer, and others — the old story of a culture of corruption, which the press has always attributed as a Republican issue is now shifting.

And the Blagojevich story, which remains alive day after day, has become a Democrat story, and that's really hurting them.

BILL SAMMON, WASHINGTON DEPUTY MANAGING EDITOR, FOX NEWS: It is also becoming a racial story, because — you're absolutely right that it is all about Democrats, but think about this.

Pretty soon the members of the congressional black caucus are going to be asked to make a hard choice — are you siding with the African- American President-elect Barack Obama who wants to bar this guy, or are you siding with the African-American Bobby Rush, a member of the congressional black caucus, who says let the guy in because he is the only black who is going to be in the Senate?

That's a tough, tough position to be in.

ANGLE: On that point, Bill, earlier this month, Bobby Rush, who we heard from yesterday, and who said basically there was no reason to "lynch" Burris just because he was being appointed by Blagojevich. But earlier this month, he had completely dismissed the idea of Blagojevich actually nominating someone, or appointing someone to take President-elect Obama's place. Let's listen to what he said earlier this month.

(BEGIN VIDEO CLIP)

REP. BOBBY RUSH, D-ILL.: He should not be able to appoint the next U.S. senator from Illinois. He has abdicated his responsibility and his authority. He has no moral basis for appointing the next senator from the state of Illinois.

(END VIDEO CLIP)

ANGLE: "No moral basis."

JEFF BIRNBAUM, THE WASHINGTON TIMES: What is amazing about this story is the layers.

Now, you can look at it in the partisan sense, look at it in the racial sense, but there will be so many components of this story now that Blagojevich has stumped the entire known world, basically, by defying the conventional wisdom — not just making an appointment but finding someone that would accept the appointment.

The result will be court fights, as we now see, at the state level —and we don't know how those will come out. There will be court fights at the federal level. There will be inter-party and intra-party sniping of many kinds.

The correct analogy to what's about to unfold here is the 2000 election and the hanging chads. Maybe we're not talking about a presidential outcome here, but we're talking about some very important matters, including getting Barack Obama's agenda passed.

By denying a Democratic seat in the Senate, basically, by the Democrats denying themselves a Democratic seat, they may be putting themselves out of reach of passing some very important initiatives because they may be down to maybe 56 votes in a Senate where you need 60 votes to get things passed.

ANGLE: And, interestingly, Charles, we also know that he offered the job, before he offered it to Burris, to another black congressman. So clearly his strategy here was to find an African-American congressman to offer this seat to.

KRAUTHAMMER: This is as cynical a playing of the race card as any politician in the north has done in decades.

BIRNBAUM: Yes, but successful playing of the race card is what we have here.

KRAUTHAMMER: Thus far.

BIRNBAUM: Right. That's the remarkable thing about it.

ANGLE: OK.

This has been and a historic year in many ways, including politics. We will talk about some of the high spots and the low ones when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PRESIDENT-ELECT BARACK OBAMA: Thank you so much, all of you, for taking the time to help celebrate, help ring in what is going to be an outstanding year for Democrats and an outstanding year for America!

(END VIDEO CLIP)

ANGLE: And we're back with our panel.

That was Barack Obama on New York's — New Year's Eve, rather, one year ago today. As 2008 enters its last few hours, we thought we would give it a proper sendoff, minus the champagne, by taking proper note of some of the key developments this year.

And one of the most notable, Bill, was the election of the first African-American president, something that at this time last year seemed like it was possible, but still distant.

SAMMON: It seemed really unthinkable. Everyone thought Hillary Clinton was going to be the nominee.

And I'll tell you, when it turned for me, when it really hit me in the solar plexus, and I vividly remember this, the Iowa caucuses. That night I was in Des Moines, and when I heard the news I remember where iw as and I remember how I felt.

It kind of blindsided me, and I thought, uh-oh, this is not something I saw coming. And I thought Republicans will be so upset, because with Hillary you had these delicious negatives you could run against this polarizing personality. With Barack Obama, this guy is hard to attack. It's like attacking hope itself.

A lot of people were saying Hillary will come back, and the conventional wisdom was that she'll recover, but it still hit me in my gut that we were at a key turning point, and, indeed, we were.

ANGLE: It's pretty amazing, isn't it, Charles?

KRAUTHAMMER: It is.

And what also happened this year is a follow-up, almost a coda to the historic election, something also happened this year, which is that within two months of his election, and still three weeks before his inauguration, we're used to it. It's no longer a big deal. This, I find, almost as amazing as the election of the first African-American.

There's going to be hoopla about all of this on inauguration day, and for a couple of days before and after. But the fact is that America is entirely at ease with this. It's almost a non-story. It's a secondary story. The economy is the big story and the wars around the world.

And the fact that it is now already a secondary story in and of itself speaks to how far America has come. It was not an issue in this campaign, and it's not an issue today.

And that's a tribute to where America is today in terms of its acceptance and tolerance of other cultures, ethnicities, and races. It is an amazing story that would happen nowhere in the world.

ANGLE: Jeff, there was another interesting story that was big news in the campaign early on, but as things got better in Iraq, the news coverage dwindled, even shriveled. And now that things are substantially better, there is almost no coverage.

BIRNBAUM: That's one of the most amazing stories of the year, in my view. One of the reasons why Barack Obama was able to pull off the upset in Iowa was that he had a strongly get out of Iraq position, stronger than the other Democrats, and beat Hillary Clinton by winning the Democratic base. But General Petraeus, in the meantime, started a surge policy that made everything irrelevant, basically, that won the war in Iraq, to say it briefly.

And so that Barack Obama is in the same place as the Iraqi prime minister and as the American people, basically, to get out of Iraq in an orderly fashion, and as soon as possible, basically, which is in a matter of just a couple short years. And so what was the major issue at the beginning of this year is now a non-issue at the end of 2008.

ANGLE: Economic issues were also big this year. My favorite was all the angst on Capitol Hill about going after the oil speculators for driving up the price. Now, I suppose, people are calling for an investigation because they have driven the price down so far that people won't be buying energy-efficient cars and it will wreak havoc with everything. But the state of the economy, Charles, obviously, as the year ends, is the number one story.

KRAUTHAMMER: I think it will be the big story, the crash in the market unlike any in decades.

And it is also a human interest story. The man at the center of it, Henry Paulson, the man who was a successful businessman who accepted the job of Secretary of the Treasury as a way to shepherd in forms of Social Security.

And all of a sudden gets hit with the worst crisis ever, and he's not quite sure what to do. One day he saves Bear Stearns, another day lets Lehman go down. I'm not an expert, but either one or the other is right, but not both.

And I'm waiting for his story of how it all affected him, and how he tried to figure out —

BIRNBAUM: This is the other reversal you are talking about, that he came in as anti-government guy, and now he's the biggest pro- government activist of all time, basically, at the U.S. Treasury, and there is an unprecedented amount of nationalization of major industries in this country as a way to avoid a real economic downturn.

Bill, a big year for the media.

SAMMON: The year that journalism died, to borrow a phrase I first heard from Roger Ailes. I never thought the press could become more biased until I saw what happened during the coverage of the Obama campaign.

Unbelievable that The Washington Post ombudsman admitted afterwards that they were basically in the tank for him. We had people talking about thrill up my leg when they heard Obama's speech.

We even had The New York Times do a story insinuating that John McCain had an affair with a lobbyist, Vicky Iseman. And just yesterday we learned that Vicky Iseman is now suing The New York Times for $27 million.

The media really had a bad year in 2008. It will take a long time to recover.

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